(Yicai) July 8 -- Accor and Hilton Worldwide Holdings have continued to expand their businesses in China since the start of this year, driven by the booming domestic tourism market and rapid growth in inbound travel, with the two hospitality giants looking at third- and fourth-tier cities for further opportunities.

Accor has over 830 hotels with more than 140,000 rooms in over 50 Chinese cities, Chairman and Chief Executive Sébastien Bazin told Yicai yesterday. Some of the Paris-based firm's mid-range brands will cooperate with local operators such as H World Group to expand business opportunities in third- and fourth-tier cities, he noted.

Accor plans to double the number of hotels in China to 1,600 by 2031, Zhu Fuming, CEO of its China arm, said to Yicai on the same day. The company will also upgrade and renovate some existing projects, such as the Peace Hotel, Zhu added.

The inbound tourism business in the Chinese mainland of Accor grew 46 percent so far this year from a year earlier, with the Asia-Pacific, the Middle East, and Europe as major sources, Zhu pointed out. "This made us realize the need to strengthen our local presence."

Hilton has also been accelerating its development in China through some of its mid-to-high-end hotel brands, including DoubleTree by Hilton and Hilton Garden Inn, which have been expanding in lower-tier markets, Qian Jin, president of Hilton China and Mongolia, told Yicai.

"DoubleTree by Hilton operates 116 hotels in the Asia-Pacific region, with 94 others under construction," Qian said. "A significant number of these projects are in the Chinese market, especially showing huge development potential in second- to fourth-tier markets."

Hilton Garden Inn runs under a franchise model in China to expand into lower-tier markets, becoming one of the core brands for the Virginia-based parent firm's asset-light strategy in the country, Qian pointed out.

However, while third- and fourth-tier Chinese cities offer relatively more business opportunities, regional characteristics vary, so foreign brands may struggle to adapt if they do not undergo localization transformation, analysts stressed. Hotel projects in these cities will increase rapidly in the future, but all hospitality companies will face challenges in attracting more guests while achieving sustainable development, they pointed out.

Editor: Martin Kadiev